Any info on LP/endowment/foundation/sovereign wealth space?
I'm interning this summer at a BB doing alternative investments in their asset management division. Not entirely sure what direction I want to go after. Obviously would love a return offer, but need to hedge my bets in any case. I know that it might be worthwhile to do a couple of years in banking to build the skillset and broad range of exits, but I honestly don't really see it being worth the suffering if I am not particularly compelled to work in PE/HF/CorpFin
Have gotten really interested in working at a fund that is an LP, such as an endowment/foundation/sovereign wealth fund, etc. From what I've heard, the job is interesting, pays well, and allows for a good WLB. Would really love to learn more about the space-- Who are the big players? Do they hire out of university? Is banking experience a prerequisite? What does the career progression look like? Comp? Any info would be greatly appreciated.
Really just want to learn whether or not that's a good direction for me to go. For reference, I'm at HYP with a decent GPA. Mostly interested in the NYC geography
Hi Intern in AM - Other, check out these threads:
More suggestions...
Hope that helps.
All three of the HYP endowments hire at least one undergrad from their respective school each year so that's probably the most straightforward path for you.
Yep, if you want to go the endowment route, stay in the ivies. Keep in mind it’s all asset allocation / primaries. There may be some co-invest or direct, but ~90% will be primaries (assuming your firm follows the external manager model). It’s not a bad place to be. You can look up pay for the top people at some endowments to give you a sense at the top level. I know that at some of the ivies, pay at the analyst/associate level was on par with that of S&T / IB at the analyst/junior associate level. Natural exits would be pension, foundation, FoF, family office, or investor relations
Thanks, this is really helpful! By any chance, do you know if Pensions/foundations typically hire out of undergrad? Or do they normally only take people with experience in the area?
Hmm I’m not the best person to speak on this unfort
Endowments frequently do hire analysts straight out of college. The more structured organizations typically hire junior roles for 3 year rotational programs and then you move on to another endowment, get your MBA, or pursue another investments related career. It is much harder to find roles beyond entry level, as the more senior "junior roles" are based on attrition and the recruiting is sporadic. It is a very competitive industry beyond entry level; any sizable endowment or foundation (>$2-4B) in an attractive market will receive hundreds of applications for one associate/manager level vacancy. It's crazy!
Would recommend joining an endowment or foundation with a "recognizable" CIO out of college to increase the chance that your name sticks out when you are applying for your next position. I cannot tell you the amount of times I have heard of someone getting a job and beating other "more qualified" candidates because the hiring manager knew their CIO.
Is it possible to lateral from an endowment fund to IB and can you go directly to PE/HF from endowment funds? Thanks.
Much easier to go the reverse (I.e. IB or PE/HF to endowment). If the endowment does external managers (rather than direct investing), it would be a tough sell to move into direct investing. Cause you’re not going to have the same modeling skills or skills analyzing a single company. A role at an endowment (that uses external managers) is an asset allocator role. That’s why pensions, FoFs, family offices are natural exits; they’re all allocator roles. Investor relations also if you’re more sales oriented because you know how the check writers think and now you’re trying to get them to write checks
Plenty of hedge funds are LPs, university endowments were some of the earliest investors in them.
Managing university endowment is a pretty prestigious position in the Ivy League, the current Harvard guy wrote a great book on quantitative finance.
For universities at least, it seems the proper path is through the academic world of finance.
Makes a lot of sense that a university would want the leading minds managing their money, especially those contributing to the field.
It also makes sense to assume that the same applies to high level economic advisors or fund managers for sovereign nations.
Consider that nepotism fills a lot of positions at the highest levels of finance, but schools and employers can open doors for you.
Do you think it's worth it to join a top 10 non-ivy private school's endowment fund right out of undergrad if your ultimate goal is direct investing? From what I read on this forum, exit opps seem much more limited than IB and you generally need an MBA for career transition?
If by direct investing you mean being a real player in the markets, there are many options.
You can form your own LP, but this is very risky without real experience.
You can work as a free trader, managing your own money for a living.
As a professional, you can manage a portfolio for a large bank or fund, many of them have trading floors as well. They will want you to work as analyst before giving you a portfolio to manage, and you can "eat what you kill" or collect a potentially insane bonus on the profits you earn. You have to become an insider to learn from insiders, as many of these funds operate on highly guarded trade secrets.
Keep in mind that you will learn from the inside as an investment banker as well, and investment bankers are also making large moves in the market. They are also doing brutal hours, while a trader is mainly active during market hours and researching off-hours.
There are no set-in-stone rules for your career track. There is a wide mix of education and experience levels in every sector, but PhDs are getting poached for these cutting-edge quant funds. You used to have high school grads on the floor in Chicago, but the days of floor trading are fading fast.
In the 2020s, quant funds are rising to dominate the hedge fund world. Programmers, statisticians, and mathematicians are often at the top of the heap. A lot of these fund managers have their own fortunes invested. A university endowment is playing in the same markets, but the politics and operations are immersed in academia. Keep in mind that many in this business are building personal fortunes to open their own ventures, or to retire and live on the interest of their personal portfolios.
Can't forget about Swenson's book, Pioneering Portfolio Management. Absolutely foundational overview from arguably the greatest to ever do it
If you did this and were certain that you wanted to make the move to direct investing, I think you'd want to lateral to either a direct investing role (less likely) or IB / sell-side research. The longer you are in the allocator world, the tougher the jump will be, so better to move in the first 1-2yrs (IMO)
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